Energy Prices

Robert Flello Excerpts

Wednesday 11th January 2012 Commons Chamber

[Caroline Flint]

I feel that the time has come for us to take stock of our position. The first line of the motion refers to an energy sector that works in the public interest. That does mean that we can still support competition, and I think there should be more competition in the sector. For all types of energy—on-grid and off-grid—it is time that we had another look at what is happening in the market. For me, energy is not like buying a phone or a car; rather, it is essential to life, and therefore a higher order of accountability is required. I will be very happy to look at the issues raised by the Committee. Select Committees are useful for the Opposition as well as the Government. I will be very happy to talk to my hon. Friend and to the hon. Member for Hexham (Guy Opperman) and to see what the Select Committee comes up with, but I think the time for standing by has passed.

[Robert Flello (Stoke-on-Trent South) (Lab)]

In Blurton in my constituency, there was the fantastic sight of houses having photovoltaic panels erected on their roofs, but the project that E.ON had with Stoke-on-Trent city council covering thousands of houses across the city has now been cut short. E.ON said to me that it understands why the Government were looking at the issues of feed-in tariffs and the cost, but it cannot understand why it was given six weeks to complete projects that were going to take five weeks to bring in.

[Caroline Flint]

It is always very helpful to hear of real examples. We have listened to many smaller businesses in this sector of course, but even the big six energy companies have concerns about the way the Government have gone about changing the rules on solar. Sadly, about 100,000 social homes may not get solar in the future because of these changes. We all agree that the tariff should come down, but, aside from that point, if the Government’s plans go ahead, people will only be able to have solar if their home is a category C residence in terms of efficiency, and therefore about nine out of 10 homes in England will no longer have the option of having solar even under the changed rules and tariff. This is another example of bad management of a project that was clearly popular among the public and that has created jobs—the sector is one of the few that has experienced growth.

In the long run, we know that the most sustainable way for people to cut their bills is for them to use less energy.

“Energy efficiency is a no-brainer because it makes homes warmer and cheaper to run.”

Those are not my words; they are the words of the Secretary of State from back in September, but what has actually happened on his watch? The number of families getting help to insulate their homes or make them more energy efficient has plummeted.

Let us take the month of April as a point of comparison. In April 2010, the month before the general election, more than 15,000 households got insulation measures through Warm Front. In April 2011, just six households got insulation through Warm Front—not 6,000, 600 or even 60, but just six. The Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), has said that this year he expects 50,000 households to get help with insulation through Warm Front, but so far fewer than 15,000 properties have been helped—not even a third of what the Minister promised. On the current trend, fewer than 20,000 households will get help with insulation this year, a fall of more than 90% on what we delivered in our last year in office.

[Caroline Flint]

Well, I have to say that some of my constituents have had help with things such as boilers, heating and also insulation.

[Robert Flello]

I am deeply troubled by the Minister’s intervention. If he visits my constituency, I will take him to houses that have had loft insulation put in through the Warm Front scheme, and to properties that have had replacement boiler systems fitted, not systems fitted for the first time. That is not the point he made a moment ago, as he will see if he checks Hansard.

[Caroline Flint]

The truth is that the Government are not on the same planet as most of the rest of us.

What the Minister did not answer is why the number of homes being fitted with insulation went down from 15,000 to six within a year. That is the question the Government should answer today. Let us be clear: when Warm Front is finally abolished next year, this will be the first Administration since the 1970s not to have a Government-funded energy efficiency programme in place. That is disgraceful. But, it is okay, because they say, “Don’t worry, we’ve got the green deal.” However, real questions have to be addressed about whether the green deal will be offered on fair terms and will actually deliver real energy bill savings, and whether it will really work for the public.

Let us start with the interest rates. Time and again, Ministers have been asked what sort of finance will be available to households interested in taking up the green deal. Time and again, they have failed to provide a straight answer. The reality is that if the level of interest is too high, given all the other pressures that families face at the moment, they will just not be interested in taking it up. Polling conducted by the Great British Refurb Campaign found that only 7% of home owners would be interested in taking up the green deal if the interest rate was 6% or more. However, we are hearing that the rate could be as high as 8% or 10%, so I ask the Secretary of State again today whether he can assure us that the green deal will be offered on fair terms and at a fair rate to the public.

In the autumn statement, the Chancellor also announced £200 million to provide incentives for the green deal. We still do not know what that money will be spent on or how it will encourage take-up. Most important of all, the fundamental idea behind the green deal—the “golden rule”, as the Government like to call it—is that the savings from better energy efficiency should cover the costs of the green deal. That is the promise being made to the public, but on looking at the small print, it is clear that the golden rule is not so golden after all. There is no guarantee that bills will not be higher after the green deal. If there is no guarantee, there is a real concern about the potential for mis-selling. The danger of what might happen out there is obvious: people will say, “We’re a Government-backed scheme—we promise you this”, but down the road they will not deliver. This measure will not balance out the costs that people are having to pay. In the light of stories about people not saving money or unwittingly inheriting higher energy bills after buying a green deal property, any credibility the scheme had will be shot to pieces.

--- Later in debate ---

[Chris Huhne]

I entirely agree with my hon. Friend on the need to continue the whole process of clarifying energy bills and making them simpler so that they are absolutely transparent and people find it easier to switch. That applies to all age groups. Compared with those of us in our 50s, those in their 60s and 70s—the silver surfers—actually do more on the internet, so we should not underestimate the ability for that to happen.

My hon. Friend might be interested to know that the letters the Government are sending out direct customers to a dedicated independent helpline as part of our programme to ensure that an extra 3.5 million homes are properly insulated by the end of 2012, and later this year we will be rolling out the green deal to help even more households save money through energy efficiency. We are ensuring that extra support is available this winter for the most vulnerable households. We are requiring energy companies to provide help to around 2 million low-income households through the warm homes discount, at a cost of £250 million for 2011-12, which is 40% more in cash terms than last year under the voluntary arrangements operated by the previous Government.

The right hon. Member for Don Valley made much of our apparent meanness on this exercise, but I do not see how the Government can be accused of being mean to those in the most vulnerable groups when it comes to energy bills when we are increasing the warm home discount by 40%. The scheme will help around 600,000 of the poorest pensioners with a core group discount of £120 this winter. We are spending £110 million on heating and insulation for low-income and vulnerable households living in energy-inefficient housing through the Warm Front scheme. We will also provide winter fuel payments to pensioners and cold weather payments to some households in areas that have extended periods of very cold weather.

[Robert Flello]

Many of the houses in my constituency and others were built without cavities. Often people take the opportunity to insulate their roofs and loft spaces but cannot do more because there are no more cavities to fill. What will the Secretary of State do about that?

[Chris Huhne]

The hon. Gentleman’s constituency is clearly a perfect place for the green deal, because the ECO subsidy will in part subsidise solid-wall homes with solid-wall insulation. That will be a very substantial step forward for many people who have not been in a position to benefit from energy efficiency because they have not had cavities to fill. A very large number of people in housing built before the first world war, and in more recent housing built quickly after the second world war, are in that position, and this measure will help.